newTMX-LSE deal needs public consultations, NDP says
By Meagan Fitzpatrick, CBC News
Posted: Jun 29, 2011 12:22 PM ET
Last Updated: Jun 29, 2011 12:22 PM ET
NDP industry critic Peter Julian held a news conference Wednesday to outline concerns about the proposed TMX and LSE merger. (Darryl Dyck/Canadian Press)
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The NDP wants the Conservative government to hold public consultations if the proposed merger between the London Stock Exchange and TMX Group Inc. is approved by shareholders.
Opposition industry critic Peter Julian held a news conference Wednesday to outline NDP concerns about the LSE offer, which is to be voted on by TMX shareholders on Thursday.
Julian said the Tories shouldn't automatically give the green light to the deal, which he described as a "takeover" and not in the national interest.
"In our opinion, the NDP's opinion, this shouldn't lead to a quick rubber-stamping of approval by the industry minister and by the Conservative government," he said. "This decision must be taken with prudence and in a responsible way and certainly with public consultations."
The MP said the Conservatives need to consider the ramifications if the merger goes ahead and should impose certain conditions. Among these conditions would be ensuring equal representation on the board of directors and protection for regional economic interests and emerging sectors, Julian said.
The NDP is raising the TMX-LSE issue this week because shareholders in TMX will be making a critical decision about who controls the company that owns Canada's largest stock exchange.
Another offer on table
LSE made its bid in February and shareholders are choosing whether to accept or reject it. The deadline for write-in votes was Tuesday evening, and officials will spend Wednesday counting those votes. On Thursday, more votes will be cast at the shareholder meeting.
Another offer on the table for TMX, from the Canadian consortium Maple Group, says that it will pay more per share than the LSE and that its offer values the TMX at $3.8 billion.
The TMX-LSE deal is valued at about $3.4 billion, based on the latest share prices.
The NDP wouldn't go so far as to say the LSE should be blocked from buying TMX. Julian would only say that public consultations should be held about any takeover of this "strategic asset."
"The offer that is on the table now is clearly not in the national interest," he said.
When the proposed merger was announced in February, Tony Clement — Christian Paradis's predecessor as industry minister — said it would be reviewed by the federal government to determine if it was acceptable under the Investment Canada Act.
According to the act, foreign investments of more than $299 million US are subject to a federal review to ensure they are of so-called "net benefit" to the country. Clement also indicated the provinces would have a say over whether the deal was "viable."
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